Financial Independence Through The Years – Part 5
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Our latest series discusses financial independence through the years and the various stages people traditionally go through to reach financial freedom. Once you establish your budget, pay off credit and reach a comfortable position on your own, everyone wants to be free from reliance on regular employment.
When you trade dollars for hours, often you wind up living from paycheck to paycheck. Getting past this hurdle is the hardest part. By saving every week, you can build a nest egg that earns interest. Over time, you will be able to live without relying on employment. Other ways to build a nest egg including establishing your own sources of passive residual income. Through creative endeavors, sales and a variety of enterprises, you can earn ongoing income for work you only did once.
Whether you refer to it as retirement or financial independence, you are truly free when you don’t need to rely on your employment because you have passive sources of income that cover your monthly bills.
Lowering your expectations and expenses is another way to reach financial freedom more quickly. Do you really need an estate or would you be content with a cottage if it meant you were financially free?
By saving more, spending less and investing your passive income you can earn more passive income. Value your time and make the most of the work you do by handling every penny carefully. The financial independence you crave will be right around the corner.
Tags:Debt Management, Financial Freedom, Financial Independence, Passive Income Residual IncomeFinancial Independence Through The Years- Part 4
We’ve discussed the establishment of financial independence through the years in this series. By examining the stages of financial independence, you can accelerate the process to reach your goals more quickly. Recognized the essential steps to financial independence also puts you on the right road toward financial success.
Our series discussed becoming financially independent from parents, dealing with credit and making major purchases. Avoiding credit is an important way to be financially independent. Even if you use credit to get past financial hurdles in the beginning, you must pay it off before it takes over your life and your available income.
Today we will address the simple yet complicated issue of setting a goal. You must set a goal to become financially independent or you will never achieve it. You need to make a strong commitment to spend less than you earn. Pay off debt with large payments rather than making small payments that pay off little more than the interest charged on the debt. Cover basic expenses and control your spending habits, which is often easier said than done. However, when you master the ability to cover your bills and spend less than you earn you are already in a financially free position.
A solid debt repayment plan and avoiding additional debts will help you attain your goals. Tomorrow we will discuss employment and how to get financial independence more quickly.
Tags:Debt Management, Financial Freedom Financial IndependenceFinancial Independence For Independence Day
Financial independence is a natural thought on Independence Day and we are taking a break from our series about financial independence through the years to discuss it. On Independence Day, you should feel free and happy about your freedom. If finances are holding you back from feeling content and free, it is time to address your level of financial independence.
While we enjoy freedom of choice, freedom of speech and a variety of personal freedoms, we often rob ourselves of financial freedom. As we continue to work at a dead end job or max out our credit cards, we are robbing ourselves of the very freedom we crave. Attaining financial independence means stepping out of the box onto unsure territory.
Financial independence should be an exhilarating, rather than a frightening journey. Your financial freedom is as important as your personal freedom. In fact, without financial independence you can never truly be free. If you are tied to a job for hourly wages and endless debt, freedom feels far away.
Take control of your destiny. Stop using your credit cards and start paying them off. Start your own business and work at night and on weekends to build your empire. There are a variety of flexible online opportunities for people with all types of skills. Find out what you like best and pursue a business in that area. When you have passion for your subject, others feel it and the opportunity becomes more profitable.
Don’t let your current circumstances hold you back. Financial independence takes time, effort and patience but is well worth it. Once you achieve financial independence, you will always have a sense of complete freedom in your life. If you start today, you will be amazed at how far you come by next Independence Day!
Tags:Debt Management, Financial Freedom Financial IndependenceFinancial Independence Through The Years – Part 3
Our latest blog series discussed financial independence and the typical stages people go through on their journey to financial freedom. From moving out to avoiding credit, we’ve discussed ways to reach for financial independence.
Today we will discuss the use of credit. Our last entry mentioned how important is it to stay out of debt. However, most people wind up taking on debt after they live on their own for awhile. Paying rent for an extended period of time inspires many people to purchase their home. Without hundreds of thousands of dollars in cash, a mortgage becomes a loan people take on to own a home.
If you do pay for a house with a mortgage, put as much money down as possible. Double up payments to pay off the mortgage more quickly. Avoid taking out other credit. When you are on your own and then assume dependents such as a spouse or children, credit becomes a way to get the money you need when you need it. After all, you are a parent yourself and you have been free of your own parents for years. Often it is better to swallow your pride and borrow from family rather than paying off high interest credit cards for years.
Finally, purchase used vehicles with cash rather than taking out a car loan. This is another payment that will rob you of financial freedom by charging interest. If you do have overextended credit, start paying down your balances. A credit counselor or accountant can assist you with getting started.
Tomorrow we will talk about financial independence and setting adult goals.
Tags:Debt Management, Financial Freedom Financial IndependenceFinancial Independence Through The Years – Part 2
Our discussion of financial independence through the years deals with the various phases people traditionally experience as they reach toward financial freedom. These steps may take some people only a few years while others may struggle for a lifetime. Understanding the road ahead helps you make better decisions to reach financial independence more quickly.
The last entry discussed the first step toward financial independence occurs when you complete your basic educational goals and live successfully on your own for a few months without assistance. Once you know you can survive on your own, you feel a sense of accomplishment and a greater ability to attain financial independence.
When you are free of debt, you have total financial independence. While many people reach toward building credit, is this really the wisest step to take? When you have debt, you are harnessed to that debt. If you paid off educational loans, you know that debt takes up a portion of your income. When you have no student loans, no mortgage, no credit cards and no vehicle payments, you are free. Your basic expenses include housing, taxes, food and insurance. The rest of your money is yours to spend as you wish. You can save for that awesome house or car so you don’t pay interest!
Tomorrow we will discuss dealing with credit, working for pay and moving on to a better place so you can have financial independence in the near future rather than as a distant goal.
Tags:Debt Management, Financial Freedom Financial IndependenceFinancial Independence Through The Years – Part 1
Financial independence means different things to different people based on their age and circumstances. When you are young, your first goal toward financial independence is to become free from your parents or loved ones. You learn to pay bills on your own so you can achieve personal and financial independence.
When you are in your teens and late twenties, financial independence takes you away from being reliant on family members. You go to college, get your degree, find your first job and make the break from your parents. As you pay for more things, the support from your parents diminishes until they stop paying for everything. At this point, you become financially independent of parents.
Does achieving this goal really mean you are financially independent? To a young person, it does. Our first goal is to become self-sustaining so we have our own residence and transportation. Once a young person pays rent, car insurance and grocery expenses for several months consistently and without help from their family, they have reach the first step toward financial independence.
But who do you depend on when you fall short of money and you are no longer dependent on your family? Tomorrow’s entry about financial independence through the years discusses the next hurdle you face on your journey toward personal and monetary freedom.
Tags:Financial Freedom Financial IndependenceFinancial Independence Without Budgeting
Can you really gain financial independence without budgeting? The problem for some people is the word budget itself. They find record books and endless tallying to be a drudgery. Why not take the work out of budgeting and have a spending plan instead?
While the road to financial independence may take a bit longer with a spending plan, you can still reach financial freedom. Instead of throwing in the towel of defeat, approach your finances in a less structured manner. Tally everything you spend in your cell phone note pad function or on a small notepad you keep in the car or your handbag. Check out what you spend on incidentals at the end of the month.
Take money off the top of your paycheck every week to cover living expenses, bills and utilities. Include savings and insurance in those general expenses. The money you have left is yours to enjoy. You can either save your extra money or spend it on something you really want.
Finally, include entertainment in your weekly spending plan. Failure to include some entertainment can cause you to spend more in the long run. When you know your entertainment budget, you make plans accordingly.
If the word budget is keeping you from attaining financial independence, have a spending plan to track your finances instead.
Tags:Financial Freedom Financial Independence
Financial Independence and Debt Management
Financial independence seems even further away when you carry significant debt. Almost seven million Americans have short term debts that exceed 20 percent of their annual income. Debt management programs consolidate debts into one payment to help people pay off these ongoing debts for greater financial freedom.A debt management program can lower your payments significantly and help you pay off debt within three to five years. As you pay off debt, you rebuild your credit rating and get rid of all those harassing letters and phone calls to collect the debt.
A credit counselor works with you to reduce your monthly payments by reviewing your current financial situation and contacting your creditors. The result is reducing interesting charges, fees and monthly payments so you can start to get rid of debt. You make one monthly payment to the debt management company who disburses the funds to all your creditors to pay them off. Your creditors will still send you statements showing your debt getting paid down.
Often people save anywhere from 20 to 50 percent on their outstanding debts by talking to a credit counselor. As a result, debt is paid off more quickly while your credit rating improves. The first step toward true financial independence is to get rid of those nagging short term debts.
Tags:Debt Management, Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 7
A variety of games and programs can be used to teach your children about financial independence so they have the right idea about money from the very beginning. Often we are conditioned to handle money in a way that doesn’t lead to financial freedom. While security is essential, financial independence should always be the ultimate goal.
Showing your children how money works firsthand is the key to their future success. By giving your children an allowance, bank accounts and even stocks to keep track of, they are actively involved in the money process at a young age. By the time your children reach adulthood, they will feel confident about money and know how to handle it. Instead of fighting debt, they can reach for the stars with money in the bank.
Our final entry gives one last piece of practical advice. Instead of getting frivolous gifts for the children you love, invest in a bond. While they are not quite as exciting as owning stock in a certain company, they are investments that yield significant profit over time. You buy paper bonds at your local financial institution or conveniently purchase bonds online for holidays and special occasions.
Teaching your children about financial independence should come as naturally as potty training or homework. Financial freedom is a goal we need to help our children understand so they don’t ask to borrow our credit cards when they get older. Instead, they will be paying for college and purchasing homes because they know how to get financial independence thanks to your training.
Tags:Financial Independence and Your Children – Part 6
Teaching our children about financial independence is essential. We often encourage our children to do what they are told and get a job, which are noble pursuits. However, if we do not teach them the skills to become financially independent they will wind up living from paycheck to paycheck like the majority of people.
To break the cycle of living from paycheck to paycheck, we need to educate our children about handling money. Our last entry discussed taking the fear out of the stock market for our children by letting them create their own dummy portfolios. This invaluable experience will put them ahead of the game.
Our suggestion today gets more bold. Once your children have successfully tracked the market for a few months and built viable dummy portfolios, let them invest on their own. Of course you wouldn’t let them make a major investment, but give them the opportunity to really put their skills in action. Give them a few shares of stock so they can watch their progress. This makes the process real for your children, rather than just playing in the Internet. Their gains and losses are actual so they can really get a feel for how the stock market and business work.
In our final entry about financial independence and your children, we will discuss additional ways to invest in stocks and bonds to create a more secure future for your children. After all, children will be the future of tomorrow and we want them to have a greater understanding of financial concepts than the people who came before them.
Tags:Financial Freedom Financial Independence